A rendering of the Northrop Grumman Habitation and Logistics Outpost (HALO), one of the elements of Gateway. Photo: NASA

Northrop Grumman ended its streak of growth in the Space Systems segment in 2024. Sales were down 1% year-over-year, in line with expectations from leadership. Despite the dip in sales, Space operating margin improved in 2024. 

CEO Kathy Warden also spoke with investors on Thursday about the opportunity for Northrop Grumman with President Trump’s plan for an “Iron Dome” missile defense shield, and the new Department of Government Efficiency (DOGE). 

Space Systems posted $11.7 billion in sales in 2024. Northrop Grumman reported that sales decreased by $142 million compared to 2023. Northrop Grumman reported $595 million in lower sales due to winding down a canceled classified Space Force satellite program, and the Next-Generation Interceptor (NGI) award going to Lockheed Martin.

Aside from these programs, CFO Ken Crews told investors that the rest of the Space portfolio grew at mid- single digits in 2024. Increased work on the Space Development Agency (SDA) satellite programs and the Habitation and Logistics Outpost (HALO) program for NASA partially offset that decrease in sales. 

Despite the dip in sales, Space Systems improved its operating income by 11% in 2024 compared to the prior year, reaching $1.3 billion in operating income. Northrop Grumman reported the 2024 operating margin rate increased from 9.5% to 10.7% due to higher estimate at completion (EAC) adjustments on the HALO program. 

Northrop Grumman provided Space guidance for 2025, expecting sales this year to be in the $11 billion range, with an operating margin in the high 10% range. Crews said there will be a $900 million headwind for the segment in 2025 with the window on the classified program and NGI, primarily focused in the first half of the year. 

“We expect Space to return to growth toward the end of 2025 and continue that expansion into 2026,” Crews said. “The primary drivers of the growth overall are strategic comms, restricted space, and the continued expansion of propulsion systems.” 

Compared to the other segments, Space was the only one in 2024 to decline in sales, but it saw the highest increase in operating income. 

Overall, Northrop Grumman reported $41 billion in sales in 2024, up 4% year-over-year. This was due to 12% growth in sales at Aeronautics Systems and higher sales at Mission Systems and Defense Systems. Company-wide backlog hit a new record of $91.5 billion.

CEO Kathy Warden was asked Thursday about President Trump’s executive order for an “Iron Dome” missile defense shield with space-based interceptors, saying Northrop Grumman “welcome[s] the urgency that the Trump administration is placing on protecting the homeland from escalating global missile threats.”

“When you think about an architecture to defend the U.S., particularly with the range that these missiles will need and the advanced threats that are emerging with hypersonic weapons, we think we’re very well positioned to support that architecture,” Warden added. 

Warden made optimistic comments about the new Department of Government Efficiency (DOGE), led by Elon Musk. Lockheed Martin CEO Jim Taiclet did the same this week. 

“Net — I see more opportunity working with DOGE,” Warden said. “I believe we all see that there is room for cost efficiency in the way that we work together, between industry and government. We’ve embraced the opportunity to share some of our observations and ideas, and are starting to do that.”